Starting the new year allows us the chance to reflect on trends we saw throughout 2022, but also gives the opportunity to predict what is on the horizon for 2023. Last year, we saw inflationary pressures, supply chain challenges, ingredient shortages, rise in flexitarian dieting, focus on functional mushrooms and growth across products that support reducing stress, improving sleep and mood support, to name a few. Let’s look at the trends SPINS is predicting will continue to grow in 2023…
Sustainability
Consumers are looking for end-to-end transparency that showcases both packaging and ingredients in a sustainable way, which is coming through in various certification trends. For example, products that are certified B-Corp, which focuses on the betterment for workers, communities, and the environment, are resonating with consumers and on the rise (+5%). Other sustainable labels, positionings and certifications that are capturing spend and growing include plant-based (+4%) and certified upcycled (+13%).
Upcycling, while representing a relatively small dollar volume ($30M) of products, is a growing trend. Adding upcycled materials to an existing manufacturers process is a win-win scenario. While not only benefiting the environment, but byproduct materials/ingredients also support ongoing production, while coming at a reduced cost, which ultimately helps the overall bottom-line for manufacturers who are on the cutting edge.
Upcycling certified products are being seen across the entire store. Everywhere from Pet Treats, Frozen Desserts, and Shelf Stable products. The upcycled product adoption is an emerging trend. Categories like Fruit Spreads & Jams & Jellies, FZ&RF Meats, Poultry & Seafood, while represent a relatively small dollar volume, posted robust growth. Given the reach upcycled products have across the store, we expect to see this trend continue throughout 2023.
SPINS: Natural Channel & Conventional Multi-Outlet (powered by IRI); 52 Weeks Ending 01.01.23- SPINS Attribute Focus: Upcycled Certified
Packaging
Sustainability through packaging is another continuation of what we saw in 2022, which we expect to remain relevant into 2023. Packaging is something shoppers can quickly evaluate and have control of what they do post consumption. Packaging materials, that are either refillable, or widely accepted within recycling programs, such as aluminum (+44%), glass (+50%) and droppers (65%) are posting strong growth.
Other instances where products are venturing towards more sustainable options, include coffee and tea pod systems. Pod/cup-based products have been scrutinized for the amount of waste their products produce, with this environmental spotlight, manufacturers have begun to pivot. Companies have started to incorporate recyclable and biodegradable options. Both Pod/Cup System – Recyclable (+6.2%) and Pod/Cup System – Biodegradable (+8.1%) have captured customers attention and will likely continue to gain traction.
SPINS: Natural Channel & Conventional Multi-Outlet (powered by IRI); 52 Weeks Ending 01.01.23: SPINS Attribute Focus: Packaging Type: Primary: Departments Grocery, Body Care, Frozen, Refrigerated, Vitamins & Supplements, Medicine & Personal Health
Grounded in Nutrition
Shoppers are gravitating towards products that are elevated with micronutrient profiles sourced from a range of superfoods and provide added value through nutrition. Buyers are becoming more cognizant of products that offer an extra kick of ‘better for you’ nutrient profiles. Consumers are scanning the packaging labels and nutrition fact panels to quickly identify which offerings have more, or less of a particular component. This ensures it aligns with their values and dietary lifestyle.
Shoppers are familiar with how certain nutrients can impact their health, diet, or help achieve a desired fitness goal. Whether a buyer is carb conscious or focused on increasing protein intake to align with a fitness regiment, the consumers know what to look for. For example, shoppers have increased their spend on categories that support assortments with keto friendly/low carb options. Segments like Cold Cereals (+47%), Yogurt (+31%) and Bread & Baked Goods (+18%) are winning among these buyers.
Data also reflects where consumers are turning to get a boost of protein above 20 grams. Categories such as Cold Cereals (+1160%), Cookies & Snack Bars (+403%) and FZ Plant-Based Meats are becoming table stakes for protein-focused shoppers.
Return to Paleo
Grain free products continue to show strong growth, buoyed by younger shoppers looking to decrease consumption based on diet preferences, product innovation, and a wider presence when dining out.
With this shift, a ‘return to paleo’ lifestyle has shown promising growth among product certifications and label-based claims that align with this diet. Certified Paleo (+16.4%), Grain Free (+15.7%) and Ancient Grains (+12.7%) captured more dollars and grew over last year.
While Paleo is far from new, it has seen a resurgence in recent times. As consumers continue to engage with these products and manufacturers invest in innovation around Paleo offerings, growth will likely continue throughout the year.
Future of Meat and Poultry
Meat performance over the past year has had its fair share of inflationary pressures due to a higher demand for meat, increased labor and fuel costs, the rise in the price of grains1 fed to farmed animals and the poultry industry being ravaged by the bird flu2, just to name a few factors. It’s no surprise that prices continue to hold high while units decrease, and shoppers turn to alternatives, or cut down. However, shoppers who continue to engage with animal-based meat products (noted in below table), are choosing to be more selective and sustainably responsible. This is shown by the increased engagement with promoted sustainability attributes that increased in sales versus prior year.
SPINS: Natural Channel & Conventional Multi-Outlet (powered by IRI);52 Weeks Ending 01.01.23; Attribute Performance Based on Subcategories – FZ&RF Bacon, FR&RF Beek & Pork Cuts, FZ&RF Burgers, FZ&RF Meat Cuts Other, FZ & RF Poultry Cuts, RF Eggs
Over the last 52 weeks, all animal-based products saw price increases. Prices rose anywhere between the 3% seen within the frozen and refrigerated meat cuts other, to refrigerated eggs increasing by 50% over the past year. With the rise in feed costs, and bird flu reducing production, refrigerated eggs in the most recent four weeks saw increases of 87% versus the prior year. Refrigerated egg prices may continue to rise in the coming months, as supply-chain challenges and out of stocks impact the supply versus demand dynamic.
So, what’s next for 2023 for the remaining animal-based subcategories?
Sources
https://www.cnbc.com/2022/04/18/price-of-corn-hits-9-year-high-commodities-food-inflation.html 1
https://www.farmprogress.com/forage/2023-cattle-futures-strong-can-producers-hang-on- 3
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Looking for more information? Please contact the SPINS Account Manager for PRESENCE, Mike Murphy at mmurphy@spins.com.
(847) 277-9500